McDonald's said yesterday it had sold the franchise rights for its restaurants in Singapore and Malaysia to Saudi Arabia's Lionhorn as part of a plan to move away from direct ownership in Asia.

The fast-food chain said it transferred its ownership interest in 390 restaurants, more than 80 per cent of which were company-owned, on Thursday to Lionhorn.

Lionhorn is led by Sheikh Fahd and Abdulrahman Alireza, who are franchisees for nearly 100 McDonald's restaurants in Saudi Arabia.

McDonald's did not disclose the financial terms of the deal.

Reuters reported in October that McDonald's was nearing a deal worth up to US$400 million (S$569 million) to franchise the outlets to the Reza group.

Bloomberg had said earlier the Reza group has about 20 businesses across sectors like manufacturing, construction, chemicals and logistics, and partners with companies including Exxon Mobil.

The Lionhorn deal is in line with McDonald's plans to bring in partners in Asia as it switches to a less capital-intensive franchise model.

The firm said it has now franchised about 1,300 outlets as part of its target to become 95 per cent franchised by the end of 2018.

McDonald's is seeking local partners to run its restaurants in Malaysia and Singapore as it pursues an international turnaround plan put in place after chief executive Steve Easterbrook took over last year, Bloomberg had said. Unlike in its other major markets, including the United States, most of its outlets in Asia are company-owned.

McDonald's is also nearing a deal to sell its stores in China and Hong Kong to a consortium led by private-equity firm Carlyle Group and China's Citic Group for up to US$3 billion, a source with direct knowledge of the matter said.

REUTERS